What happens when a load balancer fails?

Let's say I'm using Amazon's EC2 load balancer. I have it hooked up to two instances (excuse me if my terminology isn't correct). What happens if the load balancer fails? Do both instances fail to work now?

Solution 1:

Typically load balancers are clustered together into a high-availability pair.

If one load balancer fails, the secondary picks up the failure and becomes active. They have a heartbeat link between them that monitors status.

If all load balancers fail (or are accidentally misconfigured), servers down-stream are knocked offline until the problem is resolved, or you manually route around them.

Solution 2:

Yes if the load balancer instances both fail the service is essentially dead. Note that amazons uptime includes up to 4 hours of downtime a year (99.95%)